Playoff Corp.

Series Company

Item

Book Value

Fair Value

Cash

$

26,000

$

16,000

$

16,000

Accounts Receivable

30,000

10,000

10,000

Inventory

89,000

23,000

28,000

Buildings & Equipment (net)

137,000

66,000

86,000

Investment in Series Stock

141,000

Total

$

423,000

$

115,000

$

140,000

Accounts Payable

$

24,000

$

3,000

$

3,000

Bonds Payable

137,000

16,000

16,000

Common Stock

43,000

13,000

Retained Earnings

219,000

83,000

Total

$

423,000

$

115,000

$

19,000

Required:
a. Prepare the consolidating entries required to prepare a consolidated balance sheet immediately after the acquisition of Series Company shares.

2. Plaza Corporation acquired 100 percent of Square Corporation's voting common stock on December 31, 20X4, for $395,000. At the date of combination, Square reported the following:
 

At December 31, 20X4, the book values of Square's net assets and liabilities approximated their fair values, except for buildings, which had a fair value of $14,000 less than book value, and inventories, which had a fair value $34,000 more than book value.
 
Required:
Plaza Corporation wishes to prepare a consolidated balance sheet immediately following the business combination. Prepare the consolidating entry or entries needed to prepare a consolidated balance sheet at December 31, 20X4.

Pint
Enterprises

Saloon Builders

Cash and Receivables

$

95,000

$

37,000

Inventory

162,000

368,000

Buildings & Equipment (net)

431,000

87,000

Investment in Saloon Builders

217,000

Total Assets

$

905,000

$

492,000

Current Liabilities

$

83,000

$

104,000

Long-Term Debt

396,000

183,000

Common Stock

188,000

125,000

Retained Earnings

238,000

80,000

Total Liabilities & Stockholders’ Equity

$

905,000

$

492,000